ANSD : French FM tells Lebanon: IMF, dissociation only way out

FRI 19 - 4 - 2024

Date: Jul 24, 2020
Source: The Daily Star

French FM tells Lebanon: IMF, dissociation only way out

_{Hussein Dakroub And Nick Newsom}
BEIRUT: Lebanon must respect its policy of dissociation from regional conflicts and press ahead with reform, French Foreign Minister Jean-Yves Le Drian said Thursday, telling officials to "help us to help you."

Le Drian wrapped his day-long talks with top Lebanese leaders with a meeting with Maronite Patriarch Beshara Boutros Rai. He did not speak reporters after the meeting held at the patriarch’s seat in Bkirki, north of Beirut.

The French minister appeared to support Rai’s call for declaring Lebanon a neutral state in the face of regional and international conflicts, when he said Lebanon must dissociate from regional crises.

“All Lebanese officials must respect and maintain the principle of dissociation in the country from the crises through which the region is passing,” Le Drian said, speaking at a joint news conference after meeting with Foreign Minister Nassif Hitti at the Foreign Ministry.

Le Drian, the first high-ranking European official to visit Lebanon since the formation of the current government on Jan. 21, also held talks separately with President Michel Aoun, Parliament Speaker Nabih Berri and Prime Minister Hassan Diab, focusing on bilateral relations and how to help Lebanon out of its deepening economic and financial crisis, the worst in decades.

Summing up the message conveyed by Le Drian in his talks with Lebanese leaders, an official source told The Daily Star: “The French minister’s message stressed that accelerating the implementation of reforms will hasten the release of aid promised at the CEDRE conference.”

France hosted in 2018 the CEDRE conference, where international donors pledged over $11 billion in grants and soft loans to shore up Lebanon’s crumbling economy and finance key infrastructure projects in Lebanon. However, the release of the promised aid was contingent on the implementation of a string of key and structural economic and fiscal reforms in Lebanon.

Le Drian said that there was no way out of Lebanon’s crippling financial crisis other than through a program with the International Monetary Fund.

That program is conditioned on the government implementing deep and wide-reaching reforms – progress on which has so far been nonexistent.

Le Drian said that progress on reforming the country’s aging electricity sector was “not encouraging." He said that “serious and credible” measures still needed to be implemented in the fight against corruption, smuggling, strengthening judicial independence and transparency.

“Help us to help you,” he said, repeating a statement he made earlier in July.

Le Drian emphasized that France was still ready to “support Lebanon and its people” and to help them confront the challenges engulfing the country as a result of decades of mismanagement, waste and corruption.

He stressed the Lebanese Army’s crucial role in guaranteeing security and stability in the country, describing it as the “backbone” of the state.

In addition to nudging the authorities toward reform, Le Drian said France was also supporting infrastructure, youth and vulnerable communities in the country. He said France’s direct humanitarian assistance amounted to 50 million euros.

Le Drian’s visit came as French President Emmanuel Macron was said to be drafting a “comprehensive plan” to help Lebanon as it goes through its worst ever financial crisis.

Local media reported that Le Drian did not present the details of such a plan to Aoun, but emphasized that the $11 billion in soft loans and grants pledged to Lebanon at the CEDRE conference was still up for grabs if the Mediterranean country got its act together.

Le Drian did, however, offer a token of support in the form of assistance to Lebanon’s schools. “Paris has developed a plan to help French and Lebanese schools in Lebanon to face the current crisis,” Le Drian said during the meeting with Aoun. “More than 40 schools will receive financial support.”

Hundreds of Lebanese private schools face closure due to the financial crisis, threatening to swell the ranks of the country's already overstretched public schools. Many students have already transitioned to public schools after their families found themselves unable to pay tuition fees at private schools as runaway inflation stretches household budgets.

Aoun told Le Drian that Lebanon was committed to pushing key reforms and added, “Lebanon looks forward to help from France in the passage of reforms and countering corruption.” He said these reforms were being delayed due to the high number of people involved in the matter.

Diab told Le Drian that the reform of the electricity sector was a top-priority and that Lebanon needs France’s help in that regard.

“We need France’s support with the electricity file and hope for the participation of its company in building power stations,” Diab said.

He added that the interconnectedness between electricity reform and IMF assistance was “obstructing this file” and that the government was preparing to appoint the electricity sector regulatory body.

Diab said the government, Central Bank and banking sector had overcome another key issue stalling negotiations with the IMF – how to distribute the losses of the Central Bank.

“We are facing obstacles during the negotiations with the International Monetary Fund and today we overcame [the issue of] how to distribute the losses between the state, the Central Bank and the banking sector,” Diab said.

“We insist on the continuation of negotiations and we hope for France’s assistance in expediting them due to Lebanon’s dire financial circumstances.

He assured Le Drian that the forensic audit of the Central Bank would also open the whole state up to inspection.

“The forensic audit of the Central Bank allows a forensic audit in other public facilities such electricity and the ports because all the financial and monetary operations of the state pass through Banque du Liban,” Diab explained.

Diab also appealed to Le Drian to back Lebanon's bid to have the mandate of the UN Peacekeeping Force in Lebanon renewed without amendments before it expires next month.

The US and Israel, as is customary each time UNIFIL's mandate nears expiry, have been lobbying to have it expanded to empower the force to search private properties in south Lebanon that they say may be used to hide Hezbollah's weapons.

Diab urged the French envoy to do more to support the local population, and not just refugees.

“We are facing a dangerous situation regarding Syrian refugees. The Lebanese feel that the international community has abandoned them and is penalizing them by besieging them financially and economically, especially when it sends aid to the refugees. This creates sensitivities, especially in light of the rise in the poverty rate and unemployment in Lebanon,” he said.

Meanwhile, UK Minister for the Middle East James Cleverly also called on Lebanon to take urgent and drastic action to avoid an economic disaster.

Cleverly, who held a virtual visit to Lebanon, where he discussed shared economic and security goals, heard how the coronavirus pandemic and the economic crisis are impacting the livelihoods of the Lebanese people, and how UK aid is supporting the most vulnerable.

The visit was an opportunity to see first-hand how the UK’s longstanding partnership with Lebanon is implemented through the education, security, humanitarian sectors, and creating economic opportunities that totalled over $200 million in 2019, according to a statement released by the British Embassy in Beirut.

Speaking about the visit, Cleverly said: “I was deeply impressed by the passion and drive of the Lebanese people I met. I am confident that this country can have a bright future, but it must take urgent and drastic action now to avoid economic catastrophe.

“The UK is helping to tackle coronavirus in the country, which in turn will help stop future waves of the disease. This pandemic has already caused the death of so many around the world, but together we can stop it. No one is safe until we are all safe,” he added.

During his day-long virtual visit, Cleverly spoke to Diab and Hitti to underline the seriousness of the economic situation and the consequences if no progress is made. Cleverly also highlighted the importance of Lebanon’s dissociation policy.

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